San Fernando-based oil and gas producer Trinity Exploration & Production Ltd will take control London-listed Bayfield Energy Holdings Plc in an all-share transaction that the promoters say will create the country’s largest Trinidad-focused independent exploration and production (E&P) company.
The enlarged group will be named Trinity Exploration and Production plc (New Trinity) and will be listed on AIM, a market of the London Stock Exchange, where it will become the first Trinidadian managed and headquartered company, according to a statement from Trinity yesterday.
A statement from Bayfield Energy said that the combined company would have 11 operated fields, gross production of approximately 4,650 barrels of liquid per day and net production of approximately 3,800 barrels of liquid per day based on current production rates.
The transaction, which is considered to be a reverse takeover, will provide Trinity shareholders with a 55 per cent stake in the enlarged group via the issuance of approximately 256 million new Bayfield shares with the current Bayfield shareholders owning the remaining 45 per cent.
Reuters wire service, quoting a spokesman, reported that the acquisition will accelerate Trinity’s plans for a public listing. "As such, a reverse takeover of Bayfield is an elegant and frankly economical way of taking two steps forward at once," he said.
Seymour Pierce analyst Sam Wahab said the deal was positive for Bayfield, according to the Reuters report. "As a Bayfield shareholder, would you rather have 100 percent of something trading at 20 pence a share and had a pretty bad year in terms of an operational performance, or 45 per cent of something that's actually much larger?"
Bayfield, which listed on London's junior market AIM in July 2011, has a market value of £44.9 million (US$72.23 million, TT$464 million). Its shares, which were suspended from trading on Monday, last traded at 20.75 pence.
In the Trinity statement, the company’s CEO, Joel Pemberton, said: “Combining with Bayfield changes the scale of our business and better positions us to take advantage of future growth opportunities. Also through the transaction we will become a listed company on London’s AIM stock exchange which will provide our existing shareholders liquidity while allowing the company greater access to capital in the future. This transaction is just the start of a long journey which we believe will be an exciting one for everyone associated with Trinity.”
The formal completion of the takeover is expected to close in around two months’ time following the required legal process, which involves approval by the Bayfield shares, the Ministry of Energy and state-owned Petrotrin.
The enlarged group, to be led by Trinity Executive Chairman Bruce Dingwall and Chief Executive Joel Pemberton, intends to raise capital through debt or equity, Bayfield said.